On 19 September, European Commission President Ursula von der Leyen presented the 19th sanctions package against Russia. The background is ongoing drone and missile attacks, which, according to the Commission, have also violated the airspace of Poland and Romania. Von der Leyen therefore called on the Member States to approve the package swiftly.
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Key Elements of the New Sanctions Package
The package includes new restrictions in the energy and financial sectors, as well as additional export bans on goods and technologies that could be used for military purposes. A core objective is to close financial loopholes, thereby further strengthening the effectiveness of the sanctions.
Energy Sector
In the energy sector, the new sanctions package aims to significantly limit Russia’s access to fossil fuels. In addition to a ban on the import of Russian liquefied natural gas (LNG), trading companies such as Rosneft and Gazpromneft are now subject to a full transaction ban. Furthermore, 118 vessels from the so-called shadow fleet have been sanctioned, and violations of the oil embargo — including by refineries and traders in third countries such as China — are to be pursued more rigorously.
Export Restrictions
The new measures include further export bans on goods and technologies with potential military applications, especially in the area of drones. Affected are 45 companies in Russia and third countries that support the Russian military-industrial complex. The aim is to cut Russia off from key technologies in a consistent manner.
This has further implications for the financial sector. Institutions must ensure that neither financing nor transactions are directly or indirectly linked to the manufacture or delivery of such goods. This means that financial flows which may initially appear unproblematic must now be subject to deeper scrutiny to prevent inadvertent support for sanctioned entities or technologies.
Focus on Financial Flows and Cryptocurrencies
One of the most notable innovations is the targeted imposition of sanctions on crypto exchanges. The objective is to prevent Russia from circumventing existing restrictions through the use of cryptocurrencies. Given that digital asset transactions often take place outside the traditional banking system, they are considered particularly vulnerable to circumvention strategies.
As such, crypto exchanges used by Russian actors are to be specifically targeted. Foreign banks participating in alternative Russian payment systems — such as the Mir card system or the Fast Payment System (SBP) — are also in the spotlight. In addition, transactions with financial institutions that support Russia via third countries in bypassing existing sanctions are to be prohibited.
Use of Frozen Russian Assets
Another component concerns the handling of Russian assets already frozen in European accounts, estimated at around €200 billion. Until now, only the interest income has been used to support Ukraine with smaller annual amounts of between €1 billion and €3 billion.
However, the EU is now considering further-reaching steps. For instance, one option under discussion is to use the Russian central bank’s funds held at Euroclear in Belgium as a basis for issuing EU bonds without interest. These could serve as reparation loans for Ukraine, ensuring sustainable financing for continued support.
Implications for Financial Institutions
It remains to be seen what specific effects the proposed sanctions will have on banks, payment service providers and FinTechs. What is already foreseeable is a renewed increase in compliance requirements, as due diligence processes will need to be further intensified to screen both direct and indirect business partners against current sanctions lists.
This is particularly true for the crypto sector, where increased monitoring obligations are to be expected. IT systems for transaction monitoring will need to be adjusted, and staff will require training to properly implement the new restrictions.
Conclusion
With the 19th sanctions package, the EU is explicitly placing actors involved in crypto transfers in the crosshairs of its restrictions. This signals a clear intent to subject digital assets to the same level of scrutiny as traditional financial flows.
For the industry, this is likely to result in tighter involvement in sanctions implementation, as well as significant organisational and technological adjustments.
In the next step of the adoption process, the EU will coordinate the proposed sanctions with its G7 partners, currently chaired by Canada. Following approval by all Member States, the sanctions package will be published and will enter into force immediately — with the exception of the LNG import ban, which is expected to apply in full from January 2027.
